Kuala lumpur: The United States Supreme Court's recent decision to limit the President's unilateral tariff authority is expected to bolster global economic and market sentiment, with experts predicting potential benefits for Malaysia's exports and economic outlook.
According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid expressed that the ruling underscores the effectiveness of the separation of powers in the US, potentially curbing harmful global economic policies. While the Trump administration might still explore ways to enact protectionist measures, the process could be prolonged, mitigating immediate global economic risks. This development could foster increased global economic growth, advantageous for open economies like Malaysia, which recently reported a 19.6% growth in exports for January 2026.
Dr. Mohd Afzanizam noted that the global financial markets would likely respond positively, with potential benefits for Malaysia's capital markets and currency, particularly the ringgit, which might strengthen against the US dollar.
Meanwhile, economist Dr. Nungsari Ahmad Radhi highlighted that the Supreme Court's decision clarifies tariffs as taxes, requiring Congressional approval before implementation. While the President might pursue tariff measures through legislation, reliance on executive orders exposes such actions to legal challenges, creating uncertainty in trade arrangements. He emphasized that tariffs imposed via executive orders could face legal challenges, necessitating reimbursement of collected tariffs.
The Supreme Court's ruling invalidated tariffs under Trump's International Emergency Economic Powers Act (IEEPA), prompting the enactment of a temporary 10% global tariff under Section 122 of the Trade Act of 1974, limited to 150 days.
IPPFA Sdn Bhd director Mohd Sedek Jantan remarked that the Supreme Court decision maintains existing trade arrangements, with Malaysian exporters needing to focus on policy execution rather than anticipating changes in US market access. The new 10% tariff, presented as a temporary, economy-wide duty, does not single out Malaysian goods, minimizing immediate impacts on trade volumes and maintaining competitiveness.
Mohd Sedek further explained that the temporary nature of the tariff limits its impact, with potential short-term effects manifesting as margin compression or pricing adjustments, rather than demand shifts away from Malaysia. Malaysia's diverse export base and regional supply chain integration contribute to its resilience.
In a separate note, Hong Leong Investment Bank Bhd observed that the temporary tariff creates a "lower tariff window," encouraging US importers to frontload purchases. For Malaysia, the 10% tariff represents a significant reduction from previous reciprocal tariffs, potentially boosting export momentum, especially in sectors like electronics manufacturing, gloves, and technology.
Since the Agreement on Reciprocal Trade (ART) was signed last year, Malaysia has maintained that its sovereignty and national interests remain protected. The agreement allows 1,711 Malaysian export product lines to enjoy tariff exemptions in the US, enhancing price competitiveness and strengthening Malaysia's global supply chain position.
Malaysia's Investment, Trade, and Industry Minister, Datuk Seri Johari Abdul Ghani, acknowledged the Supreme Court decision, stating that Malaysia is reviewing recent US legal and policy developments. He also noted that Malaysia is analyzing the scope and potential impact of Trump's temporary 10% tariff.
Dr. Anthony Dass, CEO of FSG Advisory Sdn Bhd, suggested that Malaysia might need to engage with US authorities to clarify implementation details and support exporters through trade finance and working capital assistance. He also emphasized the importance of ASEAN's coordinated regional measures to strengthen supply chain stability and investor confidence.